ECON 101 Lecture Notes - Lecture 14: Ceteris Paribus, Barter, Grapefruit Juice
Document Summary
Manufacturing and trading: to demonstrate how traders will profit from a shift in development, we exclude anything and anything that is foreign to the process. Thus we remove capital and find the economy to be barter. There are two people inside this community, elizabeth and brian (example) They live close to each other and they each participate in two activities: bread baking and growing apples. Elizabeth will produce 20 loaves of bread and no apples, 10 loaves of bread and. 10 apples, or no bread and 20 apples, within a certain amount of time. In other words, three points on the frontier of development possibilities for. Elizabeth equate to 20 bread loaves and no apples, 10 bread loaves and 10 apples, and no bread and 20 apples. As a customer, elizabeth likes consuming both bread and apples, so she wants to make (and consume) 10 bread loaves and 10 apples.
